When considering her budget, the highest indifference curve that a consumer can reach is the
A)one that is tangent to the budget constraint.
B)indifference curve farthest from the origin
C)indifference curve that intersects the budget constraint in at least two places.
D)None of the above is correct.

Question

Quizplus · Accepted Answer

The highest level of utility a consumer can achieve while still being within her budget is at the point where the budget constraint is tangent to her highest attainable indifference curve. This is because any point beyond that (i.e. a higher indifference curve) would require the consumer to spend more money than she has available in her budget. Therefore, the correct answer is A.

When Considering Her Budget, the Highest Indifference Curve That a Consumer